Southern California Labor Situation

July 16, 2004

Dear APL Customer:

Labor shortages at the ports of Los Angeles and Long Beach continue to cause some delays in the delivery of cargo. However, I am pleased to report that this situation, affecting all carriers since the July 4 weekend, is gradually improving.

We are continuing to liaise closely with the Pacific Maritime Association (PMA) about our labor requirements. Based on information from the PMA and the International Longshore and Warehouse Union (ILWU), we expect the labor situation to improve over the next few weeks.

We are still seeing some cargo delays of up to 36 hours, but are doing everything we can to minimize the impact on customers. We have temporarily adjusted vessels schedules to re-direct some cargo through other ports; if your cargo is affected, we will contact you directly.

Our APL staff at Global Gateway South are making every effort to work vessels as quickly as possible, and we are working with our Alliance partners and other terminal operators to ensure we manage container flows efficiently during this period.

There will be on-going challenges as the peak season develops this year but I can assure you that, regardless of the circumstances, APL and our people are committed to continuing to provide you with the very best service possible.

As always, we appreciate your support and understanding of this situation.

Please contact your local Sales or Customer Service Representative if you have any questions or need further information.

Sincerely,

David L. Noe
Vice President, Sales, Marketing and Customer Support

If you have any questions, please contact your APL Account Manager or Customer Service at 1-800-999-7733